Enforcing Kill Switch

CME Kill Switch tool enables Legal Clearing Entity (LCE) risk administrators and Execution Firm risk administrators to immediately block all new order entry and cancel all working orders.

The kill switch has three levels of kills that are enforced independently.

  • Sender Comp is the most granular level. The SenderCompID (FIX Tag 49) is made up of Session ID (first three characters), Firm ID (second three characters), and Fault Tolerance (last character).
  • Execution Firm (EF) is the next highest level and contains one or more Sender Comps assigned to an execution firm.
  • Legal Clearing Entity (LCE) is the highest level and contains one or more EFs which in turn contain one or more Sender Comps.

 

Legal Clearing Entity 1

Execution Firm 1

Execution Firm 2

EF1 -

SenderComp1

EF1 -

 SenderComp2

EF1 -

SenderComp3

EF2 -

SenderComp1

EF2 -

SenderComp2

EF2 -

SenderComp3

EF2 -

SenderComp4

 

These levels act as a hierarchy where higher level kills will affect all levels below. Examples from the table above:

  • IF EF1 - SenderComp1 is killed, all new order entry is prevented and all working orders are canceled for EF1 - SenderComp1.
  • If Execution Firm 1 is killed, all new order entry is prevented and all working orders are canceled for EF1-SenderComp1 through EF1-SenderComp3.
  • If Legal Clearing Entity 1 is killed, all new order entry is prevented and all working orders are canceled for all Execution Firms and Sender Comps that are cleared by Legal Clearing Entity 1.

Administrators

The kill switch has three levels of risk administrators that can send kill/unkill instructions.

  • Execution Firm risk administrators can be granted access to Kill Switch by their LCEs.
  • Once permissioned, EF risk admins can send kill/unkill instructions for all Sender Comps under their Executing firms. Kill/unkill instructions impact only exchanges to which the execution firm has access.
  • Multiple EF risk administrators can be permissioned for the same Execution Firm, in which case a kill applied by one administrator can be removed by another.
  • EF risk administrators can view kills that are put on by LCE administrators or CME administrators but do not have permission to change these kills/unkill instructions.
  • Legal Clearing Entity (LCE) GC2 risk administrators are automatically granted access to Kill Switch. They have permissions to kill/unkill the LCE, all Execution Firms that the LCE clears, and all Sender Comps that the LCE clears.
  • An LCE risk administrator is only able to kill/unkill activity at these levels for exchanges that the LCE clears.
  • If an Execution Firm clears CME at LCE 1 but clears CBT at LCE 2, a kill instruction sent by the risk admin at LCE 1 would only affect trading for CME.
  • LCE administrators are able to view kill/unkill status placed by EF administrators and CME administrators but not change that status.
  • CME administrators have the ability to act as both EF administrators and LCE administrators.
  • When impersonating risk admins, CME risk administrators have identical rights as the role they are impersonating.
  • CME risk administrators have the ability to view kill/unkill status placed by EF risk administrators and LCE risk administrators but not change that status.

Administrator Permissions

Administrator

May Clear:

Permissions

Legal Clearing Entity (LCE) Admin
  • Legal Clearing Entity
  • Execution Firm
  • Sender Comp
  • Kill their own LCE for permissioned exchanges across all EFs and Sender Comps.
  • Kill Execution Firms and Sender Comps orders that have been Guaranteed by that LCE.

Execution Firm Admin
  • Execution Firm
  • Sender Comp

Kill Execution Firms and Sender Comps under their Executing firms.

CME Admin
  • Legal Clearing Entity
  • Execution Firm
  • Sender Comp
  • Kill any Legal Clearing Entity, Execution Firm and or Sender Comp.
  • Kill all guaranteed exchanges for EFs and Sender Comps.
  • Use the Kill functions on behalf of any other Initiator (can impersonate a CM or EF risk admin).

 

Additional Rules

  • Kill states at different levels by different roles are independent of each other.
  • Multiple kills can be in place at the same time, however, an administrator cannot kill more than one entity at the same level at the same time. For example, if three Sender Comps are to be killed, each requires a separate kill instruction.
  • An EF can put a kill on a single Sender Comp, multiple Sender Comps, or the entire EF.
  • An LCE can place kills on specific Sender Comps, the entire EF, or the entire LCE.
  • If there are multiple kills on a Sender Comp, they will have to be removed at each level before that Sender Comp is completely unkilled.
  • A kill instruction placed at the Sender Comp level will remain in place until it is unkilled at the Sender Comp level; regardless of whether kill/unkill instructions have been placed at other levels.
  • A kill instruction placed at the EF level will remain in place until it is unkilled at the EF level; regardless of whether kill/unkill instructions have been placed at other levels.
  • A kill instruction placed at the LCE level will remain in place until it is unkilled at the LCE level; regardless of whether kill/unkill instructions have been placed at other levels.